Deutsche Bank: If the next Fed chair fails to effectively address inflation risks, the dollar may face downward pressure.

On December 2, Deutsche Bank analyst Antje Praefcke pointed out that if the next Fed chair responds to U.S. President Trump’s calls for interest rate cuts while inflation remains high, the dollar may face downward pressure. The expected nominee, White House National Economic Council Director Hassett, is seen as a loyal supporter of Trump, and Praefcke believes this increases the likelihood of Fed rate cuts. If the Fed cannot effectively curb inflation risks, it will have a negative impact on the currency. She stated that although this situation has not yet occurred, “the mere expectation in the market that the Fed may take a more accommodative stance on inflation is enough to put pressure on the dollar.” ( Jin10 )